Intellectual Property

Regarding The Rare Remittitur In Patent Litigation

They may be interesting, and rare, but are remittitur decisions really worth studying for patent lawyers?

By  
on

Every so often, I read a decision involving a rare result in a patent case. These decisions provide a welcome respite from the usual parade of claim construction and obviousness discussions one normally encounters in reviewing judicial decisions arising out of patent disputes. Considering that the overwhelming majority of patent cases settle, it is relatively rare, for example, to encounter a reasoned opinion on damages in a patent case. Which is a bit of a shame, if only because damages is an interesting subject, and clients involved in patent disputes usually have to weigh the benefit of undergoing the litigation process with the cost or potential benefit they might incur or receive from the case. A steadier stream of damages opinions could only help to bring additional clarity to the often opaque deliberative process clients and their counsel on both sides of a dispute must undergo concerning damages.

As infrequent as the sighting of a damages opinion in a patent case is, however, it is even more rare to see an opinion weighing the merits of that wonderful exercise of judicial intervention known as remittitur. More than just a Wheel of Fortune final puzzle-worthy legal term, remittitur compels that the trial judge  consider the damages evidence brought before the jury — while weighing that evidence against the reasonableness of the jury’s verdict. Put another way, the trial judge must determine that the jury was at least a little too loose with the losing party’s cash, and then offer a compromise amount for resolving the dispute based on the evidence presented at trial. Or offer the loser a new trial on damages. In short, remittitur decisions present the reader with a heady mix of judicial intervention, a willingness to acknowledge that the jury went overboard, and a stark decision for the winning party as to whether to accept the judge’s new damages amount or roll the dice with a new jury.

They may be interesting, and rare, but are remittitur decisions really worth studying for patent lawyers? In my view, yes, because they provide as good a glimpse as we will ever get into how trial judges view damages issues in patent cases. Moreover, they help us see how winning and losing sides in patent cases value patent cases post-trial. Let’s take a look at a recent remittitur decision as our example. In an April 10, 2018, opinion, Judge John A. Kronstadt of the Central District of California granted remittitur in a long-running patent dispute (the case was filed in 2013) regarding a method of creating chlorine dioxide using a catalyst called sodium molybdate. (CH2O, Inc. v. Meras Engineering, Inc. et al., Case No. LA CV13-08418 JAK). While the technology may be of most interest to the chemical engineers reading this column, the handling of the damages issues in the case should be of interest to any IP lawyer.

Of primary interest is the court’s recognition in an earlier post-trial decision that the jury’s $12.5 million verdict was excessive. As a result of that finding, the court ordered supplemental briefing on whether remittitur was possible based on the evidence adduced at trial. With the benefit of that briefing, the court recently decided that remittitur was indeed appropriate, assuming plaintiff was willing to accept the remittitur amount rather than try for a new trial on damages. Besides for offering a good summary of remittitur law, the opinion is interesting for its correct focus on properly apportioning the damages based on the actual use of the patented technology. Many patent litigators can vouch for the difficulty and uncertainty surrounding apportionment in patent cases, which at least partially accounts for the demand for well-compensated damages experts in nearly every patent case.

But the highlight of the opinion is the reasoned analysis of the losing defendants’ request for remittitur. That analysis required the court to analyze the trial testimony and arrive at a workable apportionment figure to apply to the jury’s verdict. To that end, defendants proposed a 10 percent apportionment figure that would reduce the verdict from $12.5 million to $1.25 million. In contrast, the plaintiff unsurprisingly came up with a larger apportionment figure, even though both sides based their calculations on the same simulation testing. More importantly, the plaintiff sought to use its damages demand at trial, rather than the jury verdict, as the basis for damages. Under their calculation, plaintiff’s remittitur demand ending up closer to $6 million. Pretty big spread with the defendants’ proffered amount, but also a nice discount off the jury award.

Ultimately, Judge Kronstadt accepted a little bit of each side’s analysis and proposed a remittitur amount of $3.5 million. While that amount fit nicely between the spread of post-trial damages figures the parties offered, it is important that we acknowledge the intense amount of work required of both the litigants and the court to come up with that figure. In short, it was significant. So what’s the big takeaway from this, and other remittitur decisions in patent cases? At a simple level, they offer proof of the complexity of damages issues, and the vast amount of work each side needs to undertake to prove their case. At the same time, the fact that sometimes a lot of the work needs to get done post-trial also reinforces how appreciative we should all be when a jury gets things right. When it comes to damages, sometimes the rare results help us respect the unexceptional ones.

Please feel free to send comments or questions to me at gkroub@kskiplaw.com or via Twitter: @gkroub. Any topic suggestions or thoughts are most welcome.

Sponsored

Gaston Kroub lives in Brooklyn and is a founding partner of Kroub, Silbersher & Kolmykov PLLC, an intellectual property litigation boutique, and Markman Advisors LLC, a leading consultancy on patent issues for the investment community. Gaston’s practice focuses on intellectual property litigation and related counseling, with a strong focus on patent matters. You can reach him at gkroub@kskiplaw.com or follow him on Twitter: @gkroub.

Sponsored

Topics

, , , , ,